Spread betting Future markets
The latest technology is opening up spread betting to more peoplemore of the time. With iPhone apps and similar software for otherdevices, such as Android and BlackBerry phones, traders can now betwhenever and wherever they want; apps for the iPad and other tabletsare expected to be released this year, too.
The ability to make spread betting trades on the move meanspeople can keep more closely in touch with markets and act morequickly when they spot opportunities. It's why the key spreadbetting companies are at the forefront of these advances.
"The mobile developments going on in the industry at the momentare pretty exciting," says Angus Campbell, head of sales at CapitalSpreads, whose firm has just launched an iPhone app. "Mobile phonesare now so sophisticated that clients can access their web-basedemails and all sorts of useful programmes and information."
He says there has been a major increase in demand from peoplewanting to access their spread betting account on their mobile."It's understandable. If you're a regular trader, you want to beable to monitor your positions as much as possible. It simply allowsyou to manage your portfolio better. The more you can keep on top ofyour deals, the better informed you are."
Capital Spreads is just one of many firms that have launched suchapps in recent times and Campbell says they've invested in the newtechnology to benefit clients. "The good news is that the extratechnology won't impact the cost of client dealing," he explains.
Joshua Raymond, market strategist at City Index, agrees that newtechnology is changing the way spread betters operate and helping toshape the future of the industry. "The past year has seen a giganticleap in the advancement of mobile technology and this willundoubtedly continue to be a key theme this year that attracts newbusiness," he says.
His firm launched its live trading iPhone app back in October2009 and upgraded it last year to include streaming charts withmultiple technical indicators and real-time news feeds.
Since then the firm has launched the trading app on Androidmobiles. The move has made a massive difference, says Raymond."Mobile trading is, quite frankly, huge. In the space of just oneyear from our launch of our City Trading app on iPhone, the averageamount of trades we took on mobile compared to all other platformsgrew from just 2 per cent to almost 20 per cent - a huge rise insuch a short space of time. We fully expect the launch on Androidmobiles to increase the average past the 20 per cent mark this yearwith the mobiles gaining popularity so quickly."
The firm says that on average a quarter of its clients currentlyuse its mobile trading platforms. "This emphasises the high demandfor mobile trading and just how important it is for firms to stayahead of the game in mobile technology," says Raymond.
Of course if you prefer to sit in front of your computer andtrade, the existing technology is always being improved and tweaked,not least to open up opportunities to new markets.
"At the moment, the ability to do mobile trading is just anadditional tool," explains Campbell. "The majority of trades arestill being done over the internet." The relatively young spreadbetting industry saw its deals done over the phone back in the1990s, but quickly embraced the new technology offered by theinternet to improve the dealing experience for clients.
"Nowadays we seldom get clients ringing to trade," says Campbell."It's just so easy to do it through the internet and now throughmobile telephony, that there's no need to talk directly to us,especially with all the help and guidance clients can get online."
As well as exploring the uses of new technology, the spreadbetting companies are looking at new markets for traders. "A lot ofpeople are starting to look towards exchange traded funds," saysCampbell. "It's something that we are investigating and looking atin the same way that we would for anything that a client demands."
Many clients have already moved on from betting on thetraditional stock market indices - the FTSE 100, Dow Jones and so on- to currency. Foreign exchange can be highly volatile, which givesspread betters plenty of opportunities to take positions on whethertheir chosen currency will rise or fall.
With the latest technology you don't even need to stick totraditional sterling against US dollar or euro trades. Most spreadbetting companies will offer up to 50 currency pairs whether it'spounds sterling against the Japanese yen, or the Swiss franc againstthe Australian dollar.
There's also a move away from trading traditional commodities,such as gold and oil. Seasoned spread betters are looking to othercommodities to make a killing, including cocoa, coffee, sugar, wheatand pork bellies. In short, anything traded has a moving price andyou can bet against which direction that move will be. And armedwith your Android or iPhone, you can now do it anywhere, whetherwaiting for a train or at your desk.
Spread betting is set to become more popular and easy to use inthe next 12 months and many of the major firms are now looking toexpand their business overseas. Spread betting is massive in the UKand Ireland for historical reasons. It began here because of the taxstatus: spread betters pay no capital gains tax on their profits.But the attraction of the deals is just as strong for overseastraders.
For instance London Capital Group - the owner of Capital Spreads -expanded abroad in 2008 when it bought ProSpreads.com, the Gibraltar-based spread betting company.
"We're aiming to expand globally now," says Campbell. "We'realready in Australia and are working on a multi-lingual platform,which will help service business from outside the UK."
Web-based applications are fuelling a boom in spread betting,writes Simon Read
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